Mitchell Kapor seeks to meld business, social good

Caleb Garling

Updated 1:37 am, Sunday, August 25, 2013

Mitchell Kapor and Freada Kapor Klein and their dog, Dudley, are in front of their Kapor Center for Social Impact in Oakland, where budding entrepreneurs learn to keep an eye on the bottom line while the business also produces social benefits.
Photo: Russell Yip, The Chronicle

Mitchell Kapor and Freada Kapor Klein and their dog, Dudley, are in...

Members of the College Bound Brotherhood, which the Kapor Center supports, recite a pledge during their June graduation.
Photo: Carlos Avila Gonzalez, The Chronicle

In 1989 the FBI paid a visit to Mitchell Kapor. The software executive had started a new venture after departing from his first, the pioneering consumer software company Lotus Development Corp., but the visit wasn't about either firm.

Accidentally, Kapor had been sent a diskette containing computer code for a portion of the operating system for Apple's Macintosh. He'd already returned the proprietary software, but the two agents still had questions. The nuts and bolts of a computer's engine are sensitive stuff - especially when in the hands of a competitor.

Eventually, the agents decided Kapor had done nothing wrong. But their visit alarmed him nonetheless. As he'd chatted with them, he was struck by how clueless the two government agents seemed. They had no notion of how computers worked, but were asking questions about them in the name of justice.

"This was very frightening," Kapor recalled. "They had no idea about source code or an operating system. And I came away with this very uneasy feeling because," he pauses briefly, "they had guns."

The next year, Kapor, tech luminary John Gilmore and poet and former Grateful Dead lyricist John Perry Barlow formed the Electronic Frontier Foundation (EFF) to protect First and Fourth Amendment rights in the nascent digital age. EFF now helps determine copyright and privacy policy online and has been a prime investigator of recently exposed government surveillance programs.

But Kapor says the real spark for EFF came out of something broader: a knowledge disparity. He points to sci-fi writer William Gibson's observation: The future is here - it's just not evenly distributed. Some will always have access to knowledge and technology that others don't.

Kapor's aim 23 years ago was to begin closing that gap. Today, with wife Freada Kapor Klein, he's still at it, but with a new focus. Their Kapor Center for Social Impact is a crucible for budding entrepreneurs. It offers funding and consulting for those needing a leg up on the ever-lengthening ladder of social mobility or trying to build a business that helps others do the same.

"The kind of products you envision as an entrepreneur is a function of your life experience," Kapor says. "You're going to see a different set of problems and a different set of solutions."

The Kapors also run Kapor Capital, a for-profit venture firm that works hand in hand with the Kapor Center to meld capitalist imperatives and social good.

Kapor stresses that Klein, 60, who holds a doctorate in social policy and founded the diversity-championing Level Playing Field Institute, deserves most of the credit for the Kapor Center. Together the pair function as a sort of parental yin and yang for those they mentor.

"We want to be the bridge between their world and Mitch's world," Klein says.

A geek growing up

The Kapors share their office at the center's Oakland headquarters with another family member. Dudley, their huge dog, hangs out under the table, getting an occasional scratch under the jaw.

Kapor, 63, and still with a hint of his native Long Island in his accent, describes his younger self as a geek. In the 1960s, that was less of a qualification for running a company than it is today. He grew up in a modest household, excelling at math and tinkering with kit computers. But when he graduated from Yale University in 1971, he was aimless. "I majored in recreational chemistry," he jokes.

As classmates headed for medical and law school, Kapor worked as a DJ, tried his hand at comedy, taught meditation, learned juggling and worked in a psychiatric ward.

But things changed in 1978, when he got an Apple II computer. Rather than requiring assembly, the Apple II worked out of the box. "It spoke to me," he says. He began to teach himself programming and eventually began landing development and consulting gigs. Now he had a focus. "I was in a big hurry to catch up," he says.

Kapor dropped out of business school and, in 1982, teamed up with Jonathan Sachs to start the Lotus Development Corp., a pioneer of spreadsheet and word-processing software. Its founders presaged the startups of today: Kapor designed the product and did sales; Sachs, a "brilliant" engineer, built it.

Sales took off. Lotus did more than $53 million in revenue in its first full year, and earned nearly three times that the following year. In 1995, computer giant IBM bought Lotus for the tidy sum of $3.5 billion.

Such a steep trajectory is the dream of most Silicon Valley entrepreneurs vying to be the next Google, Evernote or Amazon. But few enterprises ever reach such heights.

'Harming humanity'

Kapor and Klein have little patience for the libertarian strain that runs through much of the tech community.

"We have a responsibility to give people opportunities to do what they can do. It's a fundamental tenet of democratic society," Kapor says. "Libertarians who believe in a completely minimalist state, and don't feel we have that responsibility, are harming humanity."

He points to the widely held notion that hard work and a good product always determine success in Silicon Valley.

"There's an admirable belief about the virtues of meritocracy - that the best ideas prove the best results," Kapor says. "It's a wrong and misguided belief by well-intentioned people."

Klein calls it a sort of "reinforcing elitism" - that those on top believe they always earned their way there and those that failed didn't put in the right kind of work.

Kapor offers a simple proposition: Pretend a white entrepreneur with a computer science degree from Stanford and a minority entrepreneur without a college education make precisely the same pitch to an investor - an equally bad one. Both will likely get a "No thanks," Kapor argues, but the investor will have the unspoken thought of "See, people without impressive resumes can't compete" when he turns down the minority entrepreneur. "We make our judgments based on the evidence at hand," Kapor says.

The Kapors want Silicon Valley thinking past not just traditional resumes, but traditional business metrics, too. Entrepreneurs should have an eye on the bottom line, Kapor says, but should also weigh any venture's social benefit.

Many entrepreneurs really want to change the world, he says, but worry about sounding starry-eyed with prospective investors.

"They're afraid that will get them thrown out."

Personal relationships

At the Center for Social Impact, the Kapors meet with the entrepreneurs and companies they fund or advise, offering feedback on business plans and social strategy. It's not all serious meetings though; when a new 3-D printer arrives from FormLabs, one of their companies, Kapor excitedly tweets a picture out to his 80,000-plus followers.

Klein speaks of working with her entrepreneurs the way a dedicated mother might talk about helping her child solve a complicated math problem. Ana Roca Castro, co-founder and CEO of Plaza Familia, a multilingual education tools startup, says she turned down offers from three bigger venture capital outfits to work with the Kapors.

The other VCs "kept increasing the offer, and I kept thinking, 'You don't get it,' " she says, laughing. The personal relationship with the Kapors and their commitment to changing educational achievement gaps was worth forgoing extra dollars.

"There's no formula for social impact - no pixie dust," Kapor says. Still, the center aims to make each entrepreneur dig in and try, pushing them to abandon vague platitudes for specifics and, when possible, hard numbers.

"It's not a contract," he says. "But it's not hand waving either."

In her case, Castro reports on a number of standardized testing scores as part of her company's progress.

The Kapors also try to fund businesses that empower minorities and low-income households with the tools of technology, such as the host of learn-to-code sites that offer lessons - usually free - on how to build websites, develop software or construct algorithms, using HTML, Javascript and other common programming languages.

Kapor believes there is a general commitment by the tech community to improving life for everyone, but the vision is "one part 1950s sci-fi rocket-to-Mars and two parts 'If I can't make it into an algorithm, I'm not going to look at it.' "

That leaves an opening to foster companies meeting the needs of minorities today. While some minority communities may not be huge customer bases for tech companies now, Kapor believes they will be in the future. "Reality has a way of catching up," he says.

Shari Steele, executive director of EFF, worked with Kapor in the early days of the organization. She still tries to sit down with him once a year to pick his brain on various issues. She's in awe of how quickly he offers insights and solutions.

"You can present a problem to him, and he doesn't ever act like it's a novel thought," she says. "He's very intuitive on where things are going."

Kapor even made a bet with futurist Ray Kurzweil on whether artificial intelligence will display consciousness indistinguishable from a human - known as passing a Turing Test - by 2029. Kurzweil bet yes, Kapor said no.

Balanced lifestyle

Kapor and Klein live near Jack London Square, a short walk from their Oakland offices. But on the weekends, they're often at their home in Healdsburg, walking Dudley among the redwoods. Balance between the personal and the professional is important for Kapor, but something he accepts is tricky for entrepreneurs.

"Sometimes people just want to do their startup. That's an OK choice to make. But you have to understand what you're giving up," he says.

Lotus itself was no stranger to clawing tooth and nail to get ahead as the desktop software industry heated up in the early 1990s. Kapor had already stepped down as CEO when in 1990 the company brought one of the most cited cases on software intellectual property.

In Lotus Development Corp. vs. Borland International Inc., the Supreme Court established that neither Lotus nor any software company could copyright software menu layout or wording like "Quit" or "Print." These days that may seem like a crazy claim, but such standards were far from settled at the time.

Kapor still believes in intellectual property protection for software, but it's clear he wants to distance himself from the endless IP battles raging in Silicon Valley.

"I came to understand that there needs to be a balance," he says. "It's hard when you start your own company, and it's your baby, and you want to protect it."

Kapor has since taken major strides away from the Borland case. Not only did he help start the EFF, but he was an early adviser to the Wikimedia Foundation, which runs Wikipedia, the largest collection of knowledge in history, crowd-sourced and monitored by those who care to contribute.

"There was a view that reliable knowledge had to happen through a closed process," he says with an edge of vindication about those who questioned the effort. "We still don't realize the immune system Wikipedia has. It has incredible self-healing properties."

Kapor's eyes flicker when he talks about which technologies might change the future for the better. As he talks about tools like FormLabs' 3-D printer, you can see the wide-eyed excitement of the young man taking his first spin on a new Apple II. But decades of experience keep that enthusiasm in perspective. "Technology advances at exponential rates, and human institutions and societies do not. They adapt at much slower rates," he says. "Those gaps get wider and wider."